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What Are The Recent Changes To The Bankruptcy Law?

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made significant changes to the Bankruptcy Code which affect all debtors filing cases on or after October 17, 2005. Here are some of the major changes:

    * Waiting periods if previous filing: A debtor who has previously filed a bankruptcy and obtained a discharge, may not receive another discharge unless there has been sufficient time between the two cases. There is an 8 year period [calculated from the filing date of the first case and the filing date of the second case] for persons who have received a discharge in a chapter 7 or 11 case and wish to file a chapter 7 case, and 6 years if the first case was a chapter 13. To receive a chapter 13 discharge, the period is 4 years if the first case was a chapter 7 or 11 case, and 2 years if the first case was a chapter 13 case.

    * Mandatory Pre-Bankruptcy Credit Counseling: All individual debtors who file bankruptcy on or after October 17, 2005, must undergo credit counseling from an approved counseling agency within 180 days before filing for bankruptcy. The counseling may be waived or deferred in some cases. A list of approved credit counseling agencies is available from the Clerk's Office and on the U.S. Trustee web site at

One of the following must be filed by the debtor with the petition:

(1) Official Form 1, Exhibit D, Individual Debtor's Statement of Compliance with Credit Counseling Requirement, with any documents required by Exhibit D (including the certificate of completion of the counseling and debt repayment plan, if any, provided by the approved agency) attached; OR

(2) a motion/request for exemption from the counseling requirement due to incapacity or disability, or because you are on active military duty in a combat zone; OR

(3) a certificate describing exigent circumstances that merit a waiver of the pre-bankruptcy counseling requirement and stating that the debtor was unable to get counseling services within 5 days after requesting them. If the certificate is satisfactory to the Court, the debtor will be given 30 days from the filing of the petition to comply with the credit counseling requirement, unless the debtor asks for and is granted an additional 15 day extension.

    * Mandatory Debtor Education Course after Filing: Individual debtors filing under chapters 7 and 13 must complete a personal financial management (or debtor education) course before they will be granted a discharge. This debtor education course is separate from and required in addition to pre-bankruptcy credit counseling. To comply with the debtor education requirement, the course must be completed after the filing of the petition. A list of approved providers of personal financial management (debtor education) course providers is available from the Clerk's Office and on the U.S. Trustee web site at

Chapter 7 debtors must complete the personal financial management course and file Official Form 23, Debtor's Certification of Completion of Instructional Course Concerning Personal Financial Management, within 45 days after the date first set for the meeting of creditors. In chapter 13 cases, Official Form 23 must be filed no earlier than the date of the last payment made under the plan or the date of the filing of a motion for a discharge prior to completion of the plan. If the debtor fails to file the certification of completion, their case can be closed without discharge. The debtor may later reopen the case in order to file the certificate and receive a discharge, but a fee in the same amount as the filing fee to commence a new case on the date of reopening will be collected.

    * Tax Returns - Individual debtors must provide a copy of their most recent tax return (or a transcript of the return) to the trustee and any creditor who requests a copy no later than seven days before the date first set for the meeting of creditors.

    * Wage Statements - Copies of all wage statements, payment advices, or other evidence of payment from an employer provided to the debtor within 60 days before the date of filing of the case must be provided by the debtor to the trustee not later than seven days before the date first set for the meeting of creditors.

    * Means Test - Individual debtors who file a chapter 7 petition must file a new form which will give detailed information about their income for the purpose or determining whether a debtor's filing represents an abuse of the bankruptcy system. Some debtors may be prohibited from filing a chapter 7 case if their income would permit them to make payments to their creditors. This form is included in the forms needed to file a bankruptcy case which are posted on this site and must be filed within 15 days of the filing of the petition.

    * Waiver of Filing Fees - The court may now waive the chapter 7 filing fees for indigent debtors who file an application for waiver of the fees. The application is Official Form 3B. It is included in the bankruptcy petition forms package available from the Clerk's Office and must be filed with the petition. If the fee waiver is denied, the debtor will be required to either pay the full fee immediately or pay the fee in installments within 120 days.

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